The Nature & Importance of Entrepreneurship Chapter 1

“Being an entrepreneur and creating a new business venture is analogous to raising children- it takes more time and effort than you ever imagine and it is extremely difficult and painful to get out of the situation.” ..Oprah Winfrey

Who is an Entrepreneur? Someone who brings resources, labor, materials and other assets into combination that makes their value greater than before. Someone who introduces changes, innovations. Someone who is driven by the need to experiment, accomplish, escape authority of others. Someone who finds better ways to utilize resources, reduce waste and produce jobs for others. An aggressive competitor.

Thus Entrepreneurship.. “ is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.”

Are Entrepreneurs born or made ???

The Entrepreneurial Process “ is the process of pursuing a new venture, whether it be new products into existing markets, existing products into new markets and/or the creation of a new organization.” Identification & evaluation of opportunity Development of business plan Determination of required resources Management of the resulting enterprise

Phase 1 – Identify & Evaluate the Opportunity “ Opportunity identification is the process by which an entrepreneur comes up with the opportunity for a new venture.” Opportunities are identified mostly through informal mechanisms such as consumers, business associates, channel members, technical people etc. Window of Opportunity- The time period available for creating the new venture.

Phase 1 – Identify & Evaluate the Opportunity Evaluation process involves looking at the length of opportunity, its real & perceived value, its risks and returns, its fit with personal skills and goals of entrepreneur, and its uniqueness or differential advantage in its competitive environment. - What market need does it fill? - What personal observations have you experienced or recorded with regards to that market need? - What social conditions underlies this market need? - What market research data can be assembled to describe this market need? - What patents might be available to fulfill this need? - What competition exists in this market? How would you describe the behavior of this competition? - Where is the money to be made in this activity?

Phase 2- Develop a Business Plan The description of the future direction of business is called a business plan. Time consuming but essential for developing the opportunity and determining the resources required, obtaining those resources and successfully managing the resulting venture.

Phase 3- Determine the resources required Starts with the appraisal of present resources and grading of resources required in order of importance. Next step is acquisition of required resources in timey manner while maintaining maximum ownership. Identification of alternative suppliers.

Phase 4 – Manage the enterprise Management function requires the entrepreneur to use acquired resources for implementation of business plan. Dealing with operational problems Determining management style and structure. Establishing control system

Aspects of Entrepreneurial Process Identify & evaluate opportunity Develop business plan Resources required Manage the enterprise Opportunity assessment Creation & length of opportunity Real & perceived value of opportunity Risks & returns of opportunity Opportunity versus personal skills & goals Competitive environment Title Page Table of Contents Executive Summary Major section 1. Description of business 2. Description of Industry 3. Technology Plan 4. Marketing Plan 5. Financial Plan 6. Production Plan 7. Organization plan. 8. Operational Plan 9. Summary - Appendix Determine resources needed Determine existing resources Identify resource gaps and available suppliers Develop access to needed resources. Develop management style, Understand key variables for success. Identify problems Implement control system Develop growth strategy.

Role of Entrepreneurship in Economic development Boosts per capita output and income. Initiates and constitutes changes in the structure of business and society. Stimulates product evolution process ( process for developing and commercializing an innovation. Iterative synthesis: The intersection of knowledge and social needs that starts the product development process and leads to a marketable innovation.

How to bridge the gap between science & marketplace? Government as an innovator: A government that is active in commercializing technology. It could be done through Technology transfer. A process that commercializes the technology in the labs into new products. Corporate Entrepreneurship: refers to entrepreneurship within an existing business. Existing businesses have the financial resources, business skills and marketing and distribution system to commercialize an innovation that is why the entrepreneurial spirit in organizations is getting popular. Independent Entrepreneurship: refers to creating new organizations and bringing new products and services to the market by individual entrepreneurial spirit.

Review & Discussion What is role of government in entrepreneurship? What specific steps should the government take?